A Zambian based broker has attributed the failure of the Lusaka Securities Exchange – LuSE alternative market to attract successive listings to the fact that Zambia has limited investors who wish to invest money in a business that do not guarantee a return and security. The alternative market is a tier created by LuSE to facilitate the raising of capital and for the growth of Small and Medium Enterprise – SMEs.
Following much research and deliberations into the needs of SME’s in relation to capital raising on the market, it was determined some time back that a second listed tier would be ideal to meet the peculiar concerns of such small and mid size companies be established.
In an exclusive interview with the Zambia Business Times – ZBT, the source whose identity has been withheld said the country is not yet at the level of initiatives such as the alternative market as most SMEs in Zambia are family owned and do not want to be open to public scrutiny.
The source says the people and small businesses who the alternative market was created for do not fully understand what it means and how it can benefit their business. “I do not see much of a difference between the quoted tier and the alternative market tier. And so it could have been better for LuSE to encourage people to take advantage of the quoted tier that already existed and not introduce an alternative market tier which does not guarantee return and security for an investors’ money,” the source said.
The source has since advised LuSE to encourage people to take advantage of the quoted tier that has seen a number of company’s such as Cavmont Capital Holdings, Bata Shoes Plc and other rise to meeting the requirements of being listed on LuSE market.
The source stated that the alternative market cannot work in the country at the moment but that it can be of use in the future. Zambia, like most countries around the world, has a large SME sector. The sector has yet to be fully developed and contribute significantly to the creation of wealth for individuals and the country as a whole.
